Juniper Networks jumps after WSJ reports on potential sale to HPE
by Jordan Novet · CNBCKey Points
- HPE could announce a deal to buy Juniper Networks as soon as this week, the Wall Street Journal reported on Monday.
- Juniper shares soared after the report was published.
- HPE's fastest growth in the latest quarter came from the segment that includes data center networking.
In this article
Follow your favorite stocksCREATE FREE ACCOUNT
Juniper Networks shares soared more than 20% in extended trading on Monday after the Wall Street Journal reported that Hewlett Packard Enterprise is in "advanced talks" to acquire the company for around $13 billion.
A deal could be announced as soon as this week, the Journal said, citing people familiar with the matter. HPE declined to comment. A Juniper representative didn't immediately respond to CNBC's request for comment.
Juniper, which has long competed with Cisco in the networking equipment market, underperformed the tech industry last year. The company's stock price fell about 8% in 2023, while the Nasdaq Composite gained 43%. HPE rose nearly 10%.
Juniper's revenue shrank 1% in the third quarter from a year earlier to $1.4 billion.
A deal could bolster HPE's efforts to challenge Cisco, the leading provider of networking switches. In the latest quarter, HPE reported 2% revenue growth from a year earlier. Its fastest-growing segment in the quarter was Intelligent Edge, which includes data center switching.
HPE held $4 billion in cash and equivalents at the end of October.
HPE was formed in 2015, when Hewlett-Packard split into two companies. HP, the other spinout, makes PCs and printers.
Since the split, HPE has largely avoided making splashy acquisitions. Its biggest deal was the $1.5 billion purchase of supercomputer maker Cray in 2019.
In May, HPE agreed to sell its stake in the Chinese joint venture H3C for $3.5 billion. An executive said at the company's analyst meeting in October that HPE doesn't plan to hold excess cash over the long term.
Read the full Wall Street Journal report here.
WATCH: HPE CEO: AI interest is much higher than I ever anticipated, and we see an enormous pipeline